How To Avoid Wasting Money When Giving To Charity

We know that those of us who are fortunate enough to have extra money should give some of it back to society. Not only is it good for others, it’s good for us. We get a feeling of satisfaction and goodwill from giving that’s hard to duplicate. Giving is part of a healthy financial plan. However, it’s hard sometimes to get over the feeling that giving is really wasting money.

I overheard a conversation the other day between two seemingly well-off women who were bemoaning the fact that they had given to a charity that had then put most of their money toward the CEO’s salary. They felt like the money was wasted and hadn’t helped anyone except the already loaded CEO. They ended up declaring that they wouldn’t give to charity again, having decided that the system is crooked and a waste of their money.

I don’t think these women are alone. We hear all the time about the bloated overhead costs of many charities or the overblown salaries of charity or church executives. Tales abound of people who gave to a charity, only to discover that their donations were stolen by unethical employees or given to those who were not truly needy but rather “working the system” to get freebies. When you give to the church but the minister drives a tricked out Hummer, or when you give to a needy family only to discover a brand new BMW in their driveway, it’s easy to become jaded and decide that all charitable giving is a scam and a waste of your hard earned money. But despite the fact that some charities are flawed, giving is still worthwhile.

So how do you deal with the feeling that you’re being taken advantage of and make giving a good use of your money?

Research the charity: Don’t give to just any charity. Research your choices thoroughly to make sure that they are legitimate and that they will use your money wisely. Good charities make it easy for you to determine how your contributions are used. They provide information about how much donor money goes to overhead, salaries, and to the cause you’re trying to support. They make this information publicly available on their websites or in their printed publications. Some charities also let you specify how your money is to be used while others simply pool the money into a general fund. Give to those who give the most money to the people or causes you’re trying to support.

Watch out for scams: Charity scams abound. Never give in response to an unsolicited email or phone call. These are often (but not always) scams. Research the group in question and then, if you feel moved to give, give to them directly through their website or by calling them yourself. Use your credit card for your donation as it provides you some extra protection over cash or check. If you doubt the legitimacy of the charity, be safe rather than sorry and give elsewhere.

Give to an individual rather than an organization: If you’ve been burned by a big bureaucracy, you might prefer to give directly to individuals that you know. Perhaps your church keeps a list of members in need of assistance that you could help. Maybe you can give money to a neighbor’s child who wants to go to college but can’t afford it. Maybe you just know someone who is out of work and could use some financial help. Private donations to individuals aren’t tax deductible, but you still get the joy of giving and a reasonable assurance that the money is going where it’s needed.

Give time or goods instead of money: If you are wary of giving money, try giving your time or goods instead. Clean out your closet and give your gently worn clothes to a woman’s shelter or Goodwill. Donate old children’s books to a hospital, library, or literacy program. Volunteer to clean up a stream or roadside. Volunteer with Habitat for Humanity to help build a house. Donate an old car to an organization that can use it or sell it to make money. You don’t have to give money to make an impact. Time and items can make a big difference to many charities and you have some assurance that your time or goods were used wisely.

Set up your own charity: If you have a lot of money to give, think about starting your own charity. There’s a lot of legal paperwork involved in starting a charity, but you can retain control over your mission and make sure that the money goes where you want it to. If that’s too much trouble, you can start a scholarship at your alma mater and designate the qualifications students need to receive the money. You can also start an independent scholarship that a student bound for any university can apply for.

There are lots of ways to protect what you give and to make sure it will do the most good. Charitable giving should be a joy and not feel like a waste of money. Take these steps to direct your efforts to where they can do the most good.

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7 Responses to How To Avoid Wasting Money When Giving To Charity

  1. Ashley says:

    As someone who works in the NGO world, I have a vested interest in making sure people donate to legitimate organizations (like mine). My recommendation is to look for a symbol on their website indicating that their practices have been reviewed by a third party, such as Better Business Bureau, Charity Navigator, or GuideStar. Also make sure to do research on the the types of programs the organizations administers and how effective they are – don’t be afraid to ask questions!

    Admittedly, it is helpful for us NGOs when we get unrestricted funds that can help us run our operation (lights and office supplies cost money!), but you definitely want to look for an organization that’s not paying their management exorbitant salaries.

  2. Stephan says:

    this is definitely something that is popping up more and more often because of the ease with which scams are now run using the internet. 20 years ago running a succesful charity scam was not easy or easy to hide. Now, someone half way around the world can scam you and you will never know who it really was. pick your own, ignore unsolicited contact, and as posted in the article, consider giving your time, not only are you helping but you will be actually meeting the people you are helping and you can put a face to the problem.=)

  3. FinanceFreak says:

    Legitimate microlending sites can be a good way of cutting out the middleman and helping deserving parties directly.

  4. Christy says:

    You should check out as well. It is a great site that where you can donate both your time and money, and the great thing is that they vet their organizations and evaluate them in everything from financials to leadership and therefore you are guaranteed to be donating to only top performing NGOs. Also, 100% of you donation goes to the organization, they take no cut, which is the coolest part.

    Check their site, it’s worth it!

  5. John Beidle says:

    Some great points are made here.

    I sincerely hope Washington does not change the tax deductibility of charitable donations. I am a firm believer in the right of an individual to determine where the funds for their public interests are spent and should not be restricted, infringed upon or abused by the Federal government.

    Please let your elected representatives know if you believe similarly.

  6. Disgusted says:

    ugh! Televangelists are the worst!!
    There is a certain young man on the TBN channel that is from Houston TX. and he & his family has a chauffeured limousine that he arrives at his dad’s church! His wife made the news not too long ago when she slapped an airline steward for not bringing her pillow fast enough!
    (Just goes to show

  7. Hope says:

    While I certainly think that there is a line (as disgusted mentions), please think twice and three times before deciding that your minister gets paid too much based on the car he drives.

    My minister had a used Cadillac for his family for a while…it was more affordable than you’d think at the time when gas prices were going up and up and no one wanted a big, gas guzzling car. It also worked well for driving long distances to see his kids and grandkids while keeping his wife comfortable (she has various ailments that make sitting for long distances difficult).

    But because he got so many judgmental comments about it and how the church must be paying him too much, he eventually had to get rid of it.

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